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A Mess Of Family Dynamics Alleged In Lawsuit Against Silicon Valley Entrepreneur And Color Founder Bill Nguyen

There is usually a certain gentility to Silicon Valley. For all of its spectacular successes and vastly greater numbers of lesser-known failures, most people are quite polite about things. A startup doesn’t implode disastrously as much as fade away. Executives pursue other opportunities, rather than risk telling all and damaging reputations that — in this small world — may matter later. Entrepreneurs are often eccentric and lousy managers. That’s almost a given and not worth talking about. Because above all possible pettiness, this is a place where stars are born and we are all in this together.

There are, of course, gems of exceptions.

And this latest one will stand out in the history of this place at this time. It is a rare glimpse into the families of two founders and how the start up culture of Silicon Valley is often so close, so personal, and in this particular case, spectacularly nasty. It ultimately accuses serial entrepreneur and Valley denizen Bill Nguyen (pronounced “win”) of being not only a corrupt manager but an openly abusive father. This seems to have little to do with technology or market strategies gone wrong. It is very personal.

The lawsuit just filed against Nguyen, along with his now fading away startup Color Labs and the board, starts out with rather typical allegations. Color co-founder and former top executive Adam Witherspoon cites “unsafe working conditions” and “wrongful retaliation”. These aren’t shocking. Color popped up last March with much buzz. Before even launching it had a $41 million venture funding round. And so its swift fall as talent fire sale to Apple (the site goes dark shortly) could easily come with some bruised egos.

However Witherspoon’s allegations take a dramatic turn from there. He and Nguyen started out simply as friends. Their young sons also formed a companionship and eventually Nguyen invited Witherspoon to join him in launching his photo and video sharing startup, Color. Witherspoon moved his son and wife, who also became a Color staffer, from Hawaii to Silicon Valley. It was stressful, as startups are, but then something different happened. The two boys started to fight, per Witherspoon’s complaint.

How awkward. Your son isn’t getting along with your boss’s son.

Then Witherspoon’s allegations take a turn for the bizarre. The filing describes a Christmas scene two years ago at Lake Tahoe, a popular Bay Area vacation getaway. Witherspoon’s wife witnessed Nguyen kicking his older son in the stomach. It was a show of force, she believed, meant to intimidate her own son. He and the older Nguyen son has excluded the younger Nguyen son from their play.

In today’s no-spanking parenting culture this accusation is eye-brow raising, to put it mildly. Unless, and this is quite possible, Dad and son were simply engaging in a wrestling match for fun. The Witherspoons wanted to flee from the Nguyen’s mountain retreat, but felt trapped because of their employment at Color. So they stayed. And Nguyen proceeded to tell them that their son’s “behavior was out of control”. It is unclear what he was referring to.

Per the Witherspoons, then Nguyen told other Color employees that their son was a “uncoordinated” and a “wimp”. A joke perhaps? It almost doesn’t matter. This doesn’t come off as polite stuff, especially when aimed at young children. Again, these are allegations, not truth.

It gets worse. The complaint describes a dinner scene in 2011 — the two families are socializing again, it seems — where Nguyen “grabs his son by the back of his neck” and tosses him down a hall. Mother cats do this to their kittens; Silicon Valley parents don’t. Somehow that incident prompted Nguyen to tell Witherspoon’s wife that his family would no longer socialize with hers, and hint that her failings as a parent were the cause. He then suggested the Witherspoons visit a child psychologist in Redwood City. They did, which seems an odd move, and it didn’t go well. The Witherspoons allege that the psychologist reported her findings about their son to Nguyen.

This being Silicon Valley, this happened next: Nguyen “unfriended” Witherspoon on Facebook. A diss, but it stung because Color’s software is tethered tightly to the social network. It felt like an office retaliation.

More awkwardness ensues. The two respective sons are enrolled in the same public school in Palo Alto. The Witherspoons ask that their son be transferred to a different school. This wish is met. Per the Witherspoons, Nguyen had been openly boasting to Color employees that he was “coaching” his son to “beat the shit” out of the Witherspoon’s son.

The rest of the complaint is nasty not so much in family affairs as management abuses. It alleges Nguyen had his nanny and ski instructor paid out of Color’s funds. Employees were ridiculed and intimidated by the appearance of a Nguyen buddy who happened to work at the Office Inspector General. The implied threat: this guy can ruin your credit and put you on no-fly lists if you mess with the boss. Color’s CFO was fired after raising questions about Nguyen. And finally, the company’s board of directors, led by veteran Sequoia venture capitalist Doug Leone, had Nguyen step aside from day to day operations.

When Nguyen brokered the sale of Color (its engineering team, if not product) to Apple this fall, Witherspoon claims he was excluded from the discussions, the opportunity to go to Apple, and later received an inferior severance package. He wants a jury trial. There’s no mention of Witherspoon’s performance at Color. Lawyers for Color and the company’s PR contact did not respond to requests for comments. Nguyen hasn’t yet spoken publicly about the filing.

Nguyen himself was not a golden child. He spoke with Forbes openly about this in a 2006 story about the other startup he sold to Apple, a music sharing site called LaLa. He constantly disappointed his parents, Vietnamese immigrants, with grades that ranged from As to Fs and a 1.4 grade point average his senior year. At 16 he moved out of the house to sell cars. Only he knows how this life experience has shaped him as a father and leader. He surely enjoys flouting convention, and it has worked out nicely in the form of startups that quickly sell to technology leaders.

Yet now Color will be known for more than a flip sale, including (rightly or wrongly) its founder’s parenting style.

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